Penalty under Section 270A invalid when initiation notice omitted clause specification and charge mismatched; penalty deleted for assessee.

Penalty under Section 270A was challenged where the initiation notice under Section 274 with Section 270A failed to specify the particular charge under clauses (a)-(f) of Section 270A(9), and the penalty order imposed a different charge than that recorded in the notice and assessment. The legal point is that a notice must specify the statutory charge forming the basis of penalty proceedings; absence of that specification and a mismatch between initiated and imposed charges removes a valid statutory basis for penalty. Operative effect: the penalty was deleted in favour of the assessee.

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Issues: Whether the penalty levied under Section 270A of the Income-tax Act, 1961 can be sustained where the notice initiating penalty proceedings did not specify the charge under clause (a) to (f) of Section 270A(9) and the penalty imposed pertains to a different charge than that mentioned in the notice.

Analysis: The notice for initiation of penalty proceedings under Section 274 read with Section 270A of the Income-tax Act, 1961 recorded initiation for under reporting as a consequence of mis-reporting but did not specify the particular charge as required by Clause (a) to (f) of Section 270A(9). The assessment record shows recorded satisfaction for under reporting as a consequence of mis-reporting, whereas the penalty order levied penalty for under reporting of income under Section 270A. The defect in specifying the charge in the notice and the mismatch between the charge for which proceedings were initiated and the charge on which penalty was ultimately levied resulted in absence of a valid basis for imposing the penalty.

Conclusion: The penalty imposed under Section 270A of the Income-tax Act, 1961 is deleted; decision in favour of the assessee.

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